Allegro MicroSystems, Inc. Enters Its Next Phase as a Public Company with Repurchase of 39 Million Shares Held by Sanken Electric
July 29 2024 - 3:05PM
Allegro MicroSystems, Inc. (Nasdaq: ALGM) (“Allegro”), a global
leader in power and sensing solutions for motion control and
energy-efficient systems, announced today that it has completed the
closing of the first of two repurchases for a total of 39 million
shares of common stock from Allegro’s largest shareholder, Sanken
Electric Co., Ltd. (“Sanken”), all of which will be retired.
The closing of the first repurchase was financed by
issuing approximately 29 million shares of common stock for $666
million of net proceeds to repurchase approximately 29 million
shares from Sanken. The second closing of the repurchase of
approximately 10 million shares is expected to be financed through
a combination of proceeds from an incremental term loan under
Allegro’s existing credit agreement and cash on hand.
“This share buyback and retirement represent
another important milestone in Allegro’s journey as a public
company. We believe that broader ownership, increased liquidity and
improved governance will act as a catalyst for further value
creation,” said Vineet Nargolwala, President and CEO.
Pursuant to the terms of the Share Repurchase
Agreement entered into on July 23, 2024, Allegro has agreed to
repurchase from Sanken, in a privately negotiated transaction, a
total of 39 million shares of common stock at $23.16 per share,
which is the public offering price of the primary offering closed
on July 26, 2024 minus the discount to the underwriters but before
transaction expenses and fees payable by Sanken. After giving
effect for the repurchase of the full 39 million shares from
Sanken, Sanken’s ownership in Allegro will decrease from
approximately 50.8% to 32.5%.
Pursuant to the Share Repurchase Agreement, Sanken
has agreed to a 14-month lock-up. Additionally, Allegro and Sanken
entered into an Amended and Restated Stockholders Agreement on July
23, 2024 (the “Amendment”). The Amendment provides that Sanken is
entitled to nominate two directors to the board of directors as
long as Sanken and its affiliates beneficially own, directly or
indirectly, at least 20% of outstanding shares of common stock and
one director to the board of directors as long as Sanken and its
affiliates beneficially own, directly or indirectly, at least 10%
of outstanding shares of common stock. In each case, Sanken is also
entitled to designate one Sanken observer to the board of directors
to attend meetings of the board of directors in a non-voting,
observer capacity, subject to certain exceptions. If at any point
Sanken and its affiliates beneficially own, directly or indirectly,
less than 10% of outstanding shares of common stock, Sanken will
not be entitled to nominate a director to the board of directors,
nor will Sanken be entitled to designate a Sanken observer to the
board of directors.
PJT Partners is acting as financial advisor to
Allegro in connection with these transactions.
About Allegro MicroSystems,
Inc.
Allegro MicroSystems is a leading global designer,
developer, fabless manufacturer and marketer of sensor integrated
circuits (“ICs”) and application-specific analog power ICs enabling
emerging technologies in the automotive and industrial markets.
Allegro’s diverse product portfolio provides efficient and reliable
solutions for the electrification of vehicles, automotive ADAS
safety features, automation for Industry 4.0 and power saving
technologies for data centers and clean energy applications.
About Sanken Electric Co.,
Ltd.
Sanken’s mission as a company is to provide optimal
solutions in the broad and expansive field of electricity and
electronics with semiconductors, its core business, power
electronics and peripheral fields. Sanken provides products
globally for the increasingly electrified automotive industry, as
well as for white goods and industrial equipment, which are
becoming more energy efficient as demand for electricity increases.
Sanken works to constantly innovate its technological capabilities
and provides products of assured quality to help solve global
environmental and social issues and further develop industry, the
economy and culture.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including statements
regarding amendments to Allegro’s existing credit agreement and use
of proceeds from loans thereunder, the Amendment, the Share
Repurchase Agreement, and the repurchase of shares from Sanken,
each as described above. These forward-looking statements are based
on management’s current expectations. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements, including, but not
limited to, the factors discussed under the caption “Risk Factors”
in the prospectus supplement related to this offering and our other
filings with the U.S. Securities and Exchange Commission, any of
which could cause actual results to differ materially from those
indicated by the forward-looking statements made in this press
release. Any such forward-looking statements represent management’s
estimates as of the date of this press release. While we may elect
to update such forward-looking statements at some point in the
future, we disclaim any obligation to do so, even if subsequent
events cause our views to change. These forward-looking statements
should not be relied upon as representing our views as of any date
subsequent to the date of this press release.
Contact Data:
Jalene HooverVP of IR & Corporate
Communications Phone: +1 512 751-6526jhoover@allegromicro.com
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